Funds advised by TA Associates and Warburg Pincus LLC, two leading global private equity firms focused on growth investing, have acquired a majority stake in Epassi Group from majority shareholder Bregal Milestone, a leading technology growth private equity firm. As part of the transaction, Epassi’s founder Risto Virkkala will remain invested in the next stage of the Company’s growth strategy.
Epassi, a market leader for digital employee benefit payments in the Nordics, serves approximately 10,000 employers in the region, enabling two million employees to redeem a comprehensive range of employee benefits through Epassi’s network of more than 51,000 merchants in Finland and Sweden. In 2023, Epassi expanded into the European market, adding more than 3,000 employers, 11 million employees and 11,000 merchants across Italy, the UK and Ireland to the Company’s platform.
Under Bregal Milestone’s ownership, Epassi cemented its leadership position in the Nordics and established a strong foundation for future pan-European expansion, driven by the Company’s differentiated mobile-first digital offering and multi-sided network of corporates, merchants and consumers. Since 2019, Epassi has increased Gross Merchandise Value (GMV) ninefold, the number of customers fourfold and the number of Epassi employees fivefold.
“Following our recent growth in the Nordics and expansion into the UK, Ireland and Italy, the investment from TA and Warburg Pincus comes at an opportune time as we look to accelerate growth. With the help of Bregal Milestone, we have already shown the potential that Epassi possesses, and we are ready to grow and further scale internationally. We believe this is a natural next step in our journey and are proud to welcome the support of TA and Warburg Pincus, two world-class growth investors, as we aim to expand into other business areas and markets,” says Pekka Rantala, CEO of Epassi.
“Epassi is uniquely positioned at the intersection of employee benefits technology and payments, serving a three-sided network of employers, employees and merchants. Epassi’s platform is driving the continued shift from analogue to digital solutions and helping employers develop their increasingly important employee well-being and ESG offerings. We are thrilled to be supporting Epassi on its future growth journey, with a vision to expand its role as a pan-European leader in digital employee benefits solutions and partnering with the Company’s founder, Risto Virkkala, and management team as well as with TA,” said Adarsh Sarma, Managing Director, Issam Abedin, Principal, and Tarik-Timo Ghoniem, Vice President, at Warburg Pincus.
“Epassi has established itself as a prominent, digital-first player in the employee benefits payments industry, showcasing a strong commitment to innovation and an understanding of evolving market needs. With a robust technology stack and a defensible market position in five countries, Epassi is well-positioned to expand its product portfolio and market presence across Europe, both organically and through M&A. We are excited to join Epassi on the next chapter of its journey and partner with Warburg Pincus on this acquisition,” stated Naveen Wadhera, Managing Director, Max Cancre, Director, and Laurent Indekeu, Vice President, at TA.
“We are very proud to have jointly built Epassi into one of the leading employee benefits disruptors in Europe, exponentially growing revenues and profitability since our initial investment in 2019. Through our successful M&A activity and with the strong and dedicated support of our in-house value creation team Milestone Performance Partners, Epassi successfully expanded into five European markets, accelerated organic growth and improved margins. We were pleased to have worked with Pekka and Risto to build a talented leadership team and provide stewardship across several areas, including the Company’s go-to-market strategy, technology evolution, operational integration and ESG. We wish Epassi continued success in their next stage of growth,” said Cyrus Shey, Managing Partner, Rob Hetherington, Head of Milestone Performance Partners, and Saachi Oza, Principal at Bregal Milestone.
Terms of the transaction were not disclosed. The transaction is subject to customary closing conditions. Kirkland & Ellis acted as legal counsel to Warburg Pincus and Goodwin acted as legal counsel to TA. J.P. Morgan acted as exclusive financial advisor and White & Case acted as legal counsel to Bregal Milestone and Epassi.